New home sales fell 12% in Victoria in October

According to the latest media release by the HIA (Housing Industry Association) new home sales “climbed off the mat on October” everywhere, but in Victoria.

The chart published by the HIA shows that ever since April 2011 the global trend of new private dwelling sales was downwards.

In particular, the sales were dropping significantly every month from July till September 2012 and only in October there was a modest increase of 3.4% nation-wide – but looking at Victoria alone we see a huge drop of 12.1%, even though it’s the middle of the traditionally busy period.

“We need to see evidence emerge in coming months of a stronger, broader based recovery for new home building,” Harley Dale (HIA Chief economist) said. “The fact we don’t have that evidence now is precisely why the Reserve Bank of Australia should cut interest rates next Tuesday.”

Hmmm… one would think there were enough cuts for this measure to kick in and begin lifting the new home sales. There was a cut of 50 basis points in May, another cut of 25 basis points in June, yet another cut of 25 basis points in October. None of them worked – so why would another cut make a difference?